The main event of yesterday for the EUR/USD currency pair was the decision of the European Central Bank on interest rates and the subsequent press conference of ECB President Christine Lagarde. Few doubted that in the current difficult conditions, the European regulator would not make changes to its monetary policy. Thus, the main interest rate remained at zero, while the margin rate and the deposit rate remained at 0.25% and 0.50%, respectively. Given that this decision fully coincided with market expectations, I believe that the main attention of investors was drawn to the speech of the head of the ECB. However, in my personal opinion, nothing extraordinary was said here either. Christine Lagarde confirmed that the Board of Governors decided to continue the asset purchase program under the PEPP emergency program, caused by the rampant COVID-19 pandemic in the European region, for a total of 1,850 billion euros. The program will continue until at least the end of next year. Thus, we can conclude that the ECB will follow in the footsteps of the Fed and will actively use the monetary machine to print the euro.
Although this is difficult to attribute to any surprise, it was clear that without the inclusion of the machine for printing money to buy up assets in such a volume is unrealistic. At the same time, it is possible that in the context of the pandemic, the volume of purchases of government bonds will increase. It is also impossible to completely exclude the option of reducing interest rates on the credit line, because, in the event of a deterioration in the situation with COVID-19, cheaper and more attractive loans for investors will be required to support the euro area economy. As for the package of assistance to combat coronavirus infection, its volume remained unchanged, although, given the failure of the vaccination company in the EU, measures to support the region in the fight against the epidemic could be expanded. As for vaccines and the vaccination campaign, the situation in the eurozone is far from rosy. Not only do pharmaceutical companies fail to meet the conditions for the volume of supply of vaccines, but the quality of these drugs is causing more and more complaints due to the presence of several side effects. This is especially true for the AstraZeneca vaccine, as the quality of which is becoming increasingly questionable.
In total, the global vaccine market is estimated at one hundred billion dollars. The struggle for sales markets is fierce. And the black sheep is the drug AstraZeneca, which, perhaps, has the greatest side effects and causes serious complaints about its quality and effectiveness. At least, in comparison with the Russian "Sputnik V", the AstraZeneca vaccine is a second-rate material, because it has a large number of side effects that sometimes lead to fatal outcomes. Europe is preparing for the third wave of COVID-19, which is extremely dangerous against the background of the emergence of new strains of the pandemic. Now it's time to look at the EUR/USD charts.
Daily
Despite the immutability of the ECB's monetary policy, the euro/dollar currency pair showed growth in yesterday's trading and ended the session above the previously indicated strong and important level of 1.1975. But to close just one day above a certain landmark level does not mean that you are anchoring above or below it. As I have repeatedly noted in previous materials, this requires the closing of not one, but three consecutive candles. And what are we seeing today? At the end of the review, the main currency pair of the Forex market is trading with a decrease, near 1.1932, while showing all signs of continuing the downward trend. Given that the weekly trading closes today, as well as the extremely uncertain technical picture for EUR/USD, I recommend not to go into the market and wait for Monday. Let the market sharks close the week without our participation. If you are interested in my personal opinion on the further price dynamics of EUR/USD, then at the moment I continue to consider the main scenario as a downward one. Perhaps on Monday, already taking into account the actual closing of the week, the situation will become more clear to find points for entering the market.